The ball hits a player's arm, which is in contact with the body.
The player, in most cases, argues that it is not an offence as their arm was in direct contact with their body.
Are they correct?
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There is no specific part of the Laws of the Game which mean that an arm in contact with the body is necessarily exempt from being a handball. This is covered by Law 12:
HANDLING THE BALL
Handling the ball involves a deliberate act of a player making contact with the ball with the hand or arm.
The following must be considered:
the movement of the hand towards the ball (not the ball towards the hand)
the distance between the opponent and the ball (unexpected ball)
the position of the hand does not necessarily mean that there is an infringement
[ ... some other bits which aren't relevant here ]
(my emphasis). The point here is that it is unlikely that an arm which is in contact with the body was deliberately used to make contact with the ball - but not impossible. The referee must make a judgement is to whether the contact was deliberate or not, taking into account the points listed above, and then award a direct free kick (or penalty if appropriate) if they believe the contact was deliberate.
The accepted answer is correct. The only decision the referee needs to make is whether the handling was deliberate - there is no exception to this if the hand / arm is on the body.
One thing that probably should be emphasised more here is the point in Law 12 regarding distance to ball:
The following must be considered:
- the distance between the opponent and the ball (unexpected ball)
If the ball is kicked or otherwise changes direction close to a player and it hits their hand, as long as their hand/arm is in a reasonable position (e.g. not out above their head, or extended out sideways), it is unlikely to be a deliberate handling. Players don't run with their arms stuck to their body, so even if the arm is somewhat away from the body and the ball is struck from close by, it is still unlikely to be deliberate handling as emphasised by the following point.
- the position of the hand does not necessarily mean that there is an infringement
If when a ball is stuck from close by or with speed, a player has made the additional effort to pull their arm in close to their body to avoid the ball making contact with it, and it still somehow makes contact, this further reduces the likelihood that that the handling is deliberate.
However, if the ball comes slowly or from far away (meaning the player has plenty of time avoid handling the ball) most referees will assume that because the player chose to let the ball hit their hand / arm, this is deliberate handling, even if their arm / hand is against their body.
Another form of deliberate handling that should be called is when a player places their hand against their torso, and then throws their torso at the ball, ensuring the hand makes contact with the ball. In this case, the hand / arm is against the body, but is deliberately brought in contact with the ball.
asktheref.com discussed cases of deliberate handling when the arm is against the body in great detail in questions 30887 and 28824. Obviously a lot of their views are personal opinions, but it gives some good insight into how current and active referees handle (excuse the pun) these calls.